foreign tech workers in the u.s.: failures and remediesheather.cs.ucdavis.edu/aseeslides.pdf ·...

Foreign TechWorkers in the

U.S.:Failures and

Remedies

Norm MatloffUniversity ofCalifornia at

ASEEEngineering

Deans CouncilConference

Setting theStage

Why DoEmployersHire ForeignStudentsInstead ofAmericans?

EmployerClaims of Lotsof JobOpenings

Remedies (andNon-Remedies)

Conclusions

Foreign Tech Workers in the U.S.:Failures and Remedies

Norm MatloffUniversity of California at Davis

ASEE Engineering Deans Council Conference

February 9, 2016(updated February 11)

http://heather.cs.ucdavis.edu/ASEESlides.pdf

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

Table of Contents

1 Setting the Stage

2 Why Do Employers Hire Foreign Students Instead ofAmericans?

3 Employer Claims of Lots of Job Openings

4 Data

5 Remedies (and Non-Remedies)

6 Conclusions

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

Concrete Examples: “Dan” and“Ike”

• Can’t view the data unless you understand the qualitativeside.

• Two older Americans in Bay Area. “Dan” and “Ike.”

• Can’t get full-time work. (Occasional contract work.)

• Dan has MS from Top 5 university; Ike has TWO MSdegrees, from Top 10 university.

• Have up-to-date skillsets.

• Articulate, team players etc.

• Over 35.

• But my foreign students apply to the same firms, andget jobs.

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

Concrete Example: “Jim”

• Son of Chinese immigrant parents.

• BSEE, MSCS from UCD, mid-1990s.

• At “household name” engineering firm, his innovative workwas written up in the Wall Street Journal.

• But was later caught in big layoff.

• Never got steady engineering work after that.

• Today working as a technician, e.g. installing office PCs.

• The field of engineering lost this highly innovativeengineer.

• I’ve seen many, many Dans, Ikes and Jims.

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

Table of Contents

1 Setting the Stage

4 Data

6 Conclusions

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

Two Central Issues

• Saving on labor costs.

• Having immobile workers.

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

The Wage Factor

• Hard data, consistent with economic theory.

• On average, the foreign tech workers are paid less thancomparable (age, education etc.) Americans. This isacross the board, not just the “Infosyses” but alsothe “Intels.”

• Young foreign tech workers are paid a lot less thanotherwise comparable older Americans (age 35+).

Note: Unless stated otherwise, American means U.S. citizens(native, naturalized) and permanent residents.

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

The Age Factor

• Job opportunities poor for those over age 35. See studiesby NRC, American University etc.

• Wall Street Journal, Feb. 4, 2016:

Pete Edwards, EE; age 53; experience with 3-Dprinting!; having big difficulties finding work.

• The bottom line: Employers are hiring young foreigntech workers instead of older Americans.

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

The Immobility Factor

• Employers don’t want engineers to leave for another firmin the midst of an urgent project.

• D. Swaim, former architect of Texas Instruments’immigration policy, now in private practice:

• hireF-1students.com• Don’t hire Americans, because they can leave you any

time.• Instead, hire a foreign student (and sponsor him/her for

a green card), because they must stay 7-12 years.

• Google admits it.

• See also NRC report, congressional testimony.

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

Table of Contents

1 Setting the Stage

4 Data

6 Conclusions

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

“Lots of Job Openings”

• Often vaporware.

• Most jobs open for new or recent grads only.

• CEO at panel discussion says desperate to hire. NM offersto have wife, a software engineer, apply, to check CEO’sclaim. CEO backpedals; “No, she’s probably tooexpensive!” Indeed.

• Intel:

• TV panel discussion, NM and Intel rep.• NM offers (twice) to send CVs to rep. She greets the offer

with silence both times.

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

Table of Contents

1 Setting the Stage

4 Data

6 Conclusions

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

Data Showing the Problems

• Hard data, consistent with economic theoy.

• Supplemented with numerous interviews of CEOs,managers, HR people and recruiters, as well as engineersand programmers across the counry.

• Various data sources: NRC, GAO, NCSG/NSF, BLS,NACE, etc.

• Easy to lie with data; even easier to innocentlymisunderstand — Ptolemy’s epicycles.

• But I have a “statistical license.” :-) And I know howengineers are educated, hired and employed. No epicycles.:-)

• Key factors include: age, education, job type, geographicregion.

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

Some Findings• H-1B tech workers earn less than comparable Americans

(Hunt, 2011; Matloff, 2012).• Employers admit that they pay H-1Bs less than

comparable Americans (NRC, 2001; GAO, 2011).• Immigrants suppress the wages of U.S. PhDs (Borjas,

2006). (Correctly forecast by NSF, 1989.)• Older tech workers have much more trouble finding jobs

(NRC, 2001; Brown, 1998 and Brown, 2009).• Brown (UCB Econ) attributes this to the influx of young

foreign students.• Foreign workers experience a big spike in earnings when

they receive their green cards and become free agents(Mukhopadhyay, 2012).

• No STEM labor shortage, including in CS (Salzman, 2013;Costa, 2012).

• Wages essentially flat, both generally (BLS) and for newgrads (NACE).

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

Quality of the Foreign Workers

The average quality of the former foreign students now in theU.S. workforce is substantially lower than that of U.S. natives(Bound, 2009; Hunt, 2011; Matloff, 2013).Compared to U.S. natives of the same age, education etc., theformer foreign students

• are less likely to file patents;

• are less likely to be in R&D;

• if they earn a doctorate, then on average it is at aless-selective university

Given the indirect and direct displacement of Americans, thissays we are replacing more-talented people with workersof lesser talent — an alarming situation for our nationaleconomy etc.

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

Quality Examples

• “Ike” was rejected for a job in a group in which theworkers (a) all were recent foreign students and (b) allcame from very “ordinary” schools, e.g. University ofCincinnatti. Good workers, surely, but likely not “the bestand the brightest” — and probably not as good as Ike.

• A 2009 Washington Post column highlighted a worker fromIndia hired by Microsoft, with an MS from the Universityof North Texas, and working in Quality Assurance. So,likely a person of ordinary talent, doing ordinary work —hardly supporting the column’s claim that the foreignworkers are “the seeds of tomorrow’s innovation.”

• The same column profiled another student from India,with an MS from UVa, hired by TI as a test engineer —again, hardly consistent with the “innovation” claim.

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

Pro-Industry “Research”

• Most research with findings favorable to the industry areby researchers with financial ties to the industry (e.g.Zavodny “Each H-1B creates 2.62 jobs”), Peri, theBrookings people).

• Much of this research cuts ethical corners, e.g. Zavodnypaper.

• Bias is clear: Most bibliographies have NO citations toresearch counter to their goal.

• Common flaw: Failure to look at per-capita rates, e.g. inpatenting and entrepreneurship.

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

Table of Contents

1 Setting the Stage

4 Data

6 Conclusions

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

Remedies

• Industry claims the H-1Bs are either brilliant or possessrare skills.

• So, require employers to pay more. Set the legal wagefloor for foreign workers at Level IV (67th percentile).

• Ban ageist practices, e.g. auto rejection of experiencedU.S. workers.

• Have OPT revert to the original 12-month “training”period.

• Broaden the “best and brightest” categories (O-1 workvisa, National Interest Waiver for green cards).

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

NON-Remedies

• Do NOT add funds for enforcement. Most abuse isLEGAL.

• Do NOT just ban replacing Americans by H-1Bs; banhiring H-1Bs instead of Americans.

• Do NOT enact “Staple a Green Card.” (Auto green cardsto foreign STEM grad students.)

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

Just Say No toStaple-a-Green-Card

• Most new grads are YOUNG. So, would exacerbate thealready-awful age issue.

• Would reduce PhD production.

• NSF (1989): Staple-a-Green-Card would drive Americansaway from grad study.

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

1989 Internal NSF Report

See E. Weinstein, NBER, 1998. (Quotes paraphrased.)

• “Need to hold down STEM wages.”

• “Do this by flooding market with foreign students.”

• “Attract the foreign students with Staple-a-Green-Card.”

• “Stagnant wages will discourage Americans frompursuing graduate study.”

• Happened anyway due to big influx of foreign studentsafter H-1B enacted in 1990.

• Salary premium for MS over BS only $10-15,000 (ASEEPrism, January 2016). Financial disincentive for domesticstudents considering grad school!

• As NSF predicted, many PhD and even MS programs now50% foreign or more.

• Would be even worse with SAGC.

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

Table of Contents

1 Setting the Stage

4 Data

6 Conclusions

U.S.:Failures and

Remedies

ASEEEngineering

Setting theStage

Conclusions

The Bottom Line

• Thanks to ASEE for inviting me.

• I hope to challenge your unquestioned assumptions aboutforeign students and the tech job market.

• I leave you with this question:

Do we want foreign-worker programs thatdiscourage Americans from going to grad school?

• These slides available athttp://heather.cs.ucdavis.edu/ASEESlides.pdf

foreign tech workers in the u.s.: failures and remediesheather.cs.ucdavis.edu/aseeslides.pdf ·...

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